Cebu’s Infrastructure Hinders Real Estate Growth.Industry Still Growing and Can Be Better.

In an interview with Sun.Star, a Japan university professor, Hisatoshi Tachibana invests in real estate in Japan and parts of Southeast Asia, including here in the Philippines. When asked about the state of real estate here in the province, he says “People in Cebu are already good and security here is better than Manila. Many see Cebu as a good place to invest, except for the infrastructure. If infrastructure improves, many will come to Cebu.”

Tachibana owns condominiums in Manila and Cebu which he rents out and sells once the property value has increased greatly. The advantages he cites of investing in a property in Cebu is that property is more affordable her than in Japan and that he earns a higher percentage from his properties in Cebu – it’s 8%-9% compared to the 4%-5% earnings from his real estate investments back home.

The biggest problem that discourages foreigners from investing in Cebu’s real estate, according to Tachibana, is the infrastructure. The efficiency of transportation in Japan is a big edge for the country over the real estate industry here in Cebu. He believes that if Cebu’s infrastructure improves in pace with development, the province would see a much higher growth in the real estate industry.

Nicolas Pimentel, a real estate analyst, described Cebu to The Freeman as “the tail end of the government’s priorities for infrastructure projects” but “Cebu’s real estate industry is amazingly following a unique growth path, and is not taking the same cyclic pattern we observed in developed cities.” He commented that industry experts outside of Cebu are surprised that the province has been able to maintain the boom and is continuing to increase with projections still very positive. “Every corner in Cebu has potential [for development].”

He dismisses the idea that Cebu’s real estate growth is on the edge of a bubble, which is a movement in the industry from a rapid increase to a sudden decline that happens in other real estate markets, because, he explains, if that were the case, the decline should have already begun.